Rogue QROPS salespeople looking make a few dollars on pension transferring charges are making ex pats offers that can mask poor bargains.
Many of the sales reps based in Spain, the favorite destination of ex pats, are charging high arrangement costs but offering poor guidance to consolidate pension funds in to a QROPS offshore scheme.
But what appears sensible advice can cost pension investors thousands charges and lost benefits - with two main targets:
Pension consolidation - moving 1 or 2 tiny pension funds in to one QROPS scheme on the basis that a single scheme saves administration costs.
This will work for some pension savers, but some advisors and suppliers are subtracting costs of ?10,000 or even more to manage the transfers that are taken from the fund, diminishing the pension pot and effectively, reducing the long term benefit pay out.
Loss of benefits - this is when a pension financier with a workplace defined benefits scheme transfers to a QROPS.
Experienced international financial advisors would speak against this move to a QROPS takes away an assured pension and regularly additional benefits, like a widows pension and life cover that mount up to less than even the extra flexible benefits a QROPS can offer.
Transferring defined contribution pension funds in to a QROPS can offer advantages to an ex pat. An outlined contribution fund is a workplace pension run on similar lines to a personal private pension with investments in stocks and shares.
Ex pats with older QROPS plans may also benefit from transporting their fund in to a new plan with boosted benefits, like an Isle of Man 50c QROPS offering a 30% tax-free one-off sum drawdown.
If you're undecided about the integrity of your QROPS pension advisor, here are some of the alert signs:
Only QROPs from a single financial jurisdiction or supplier are offered
The adviser fudges charges and fees
QROPS transfer reports aren't individualized.
Many of the sales reps based in Spain, the favorite destination of ex pats, are charging high arrangement costs but offering poor guidance to consolidate pension funds in to a QROPS offshore scheme.
But what appears sensible advice can cost pension investors thousands charges and lost benefits - with two main targets:
Pension consolidation - moving 1 or 2 tiny pension funds in to one QROPS scheme on the basis that a single scheme saves administration costs.
This will work for some pension savers, but some advisors and suppliers are subtracting costs of ?10,000 or even more to manage the transfers that are taken from the fund, diminishing the pension pot and effectively, reducing the long term benefit pay out.
Loss of benefits - this is when a pension financier with a workplace defined benefits scheme transfers to a QROPS.
Experienced international financial advisors would speak against this move to a QROPS takes away an assured pension and regularly additional benefits, like a widows pension and life cover that mount up to less than even the extra flexible benefits a QROPS can offer.
Transferring defined contribution pension funds in to a QROPS can offer advantages to an ex pat. An outlined contribution fund is a workplace pension run on similar lines to a personal private pension with investments in stocks and shares.
Ex pats with older QROPS plans may also benefit from transporting their fund in to a new plan with boosted benefits, like an Isle of Man 50c QROPS offering a 30% tax-free one-off sum drawdown.
If you're undecided about the integrity of your QROPS pension advisor, here are some of the alert signs:
Only QROPs from a single financial jurisdiction or supplier are offered
The adviser fudges charges and fees
QROPS transfer reports aren't individualized.
About the Author:
A real, experienced QROPS advisor will tailor any pension response to your private circumstances by offering a choice of products from different QROPS jurisdictions